Speculation is growing that Turkey could allow American Pastor Andrew Brunson to return to the United States, ending a diplomatic standoff between Ankara and Washington. U.S. President Donald Trump has condemned Brunson's prosecution on terrorism charges.

Several news organizations reported Thursday that the Trump administration had reached a deal with Turkey, easing some sanctions in exchange for Ankara's reducing or dropping charges against Brunson.

Washington was expressing cautious optimism about Brunson’s release, which could come as early as Friday.

“I’m very hopeful that before too long Pastor Brunson, he and his wife, will be able to return to the United States,” U.S. Secretary of State Mike Pompeo said Wednesday. Pompeo has reportedly been involved in intense, behind- the-scenes talks with Ankara over the release of Brunson.

FILE - U.S. Secretary of State Mike Pompeo speaks to reporters outside the White House in Washington, Oct. 9, 2018.

On Thursday, State Department spokeswoman Heather Nauert told reporters she was not aware of any deal for Brunson's release. "There's a legal process that plays out," she said.

"I'm hopeful that before too long he and his wife will be able to return to the United States. That would be an important step forward for the U.S.-and-Turkey relationship. ... But we look forward to watching the case very carefully tomorrow," Nauert said.

She added that U.S. embassy officials would attend Friday's hearing in support of Brunson.

Erdogan position

In a sign of Brunson's possible release, Turkish President Recep Tayyip Erdogan appeared to distance himself from any decision. “I am the president of the Turkish Republic, a democratic and constitutional state,” he said Tuesday. “Hence, I must obey whatever the decision the judiciary gives. All related parties must follow the judicial rulings. That’s it.”

Erdogan has been at the forefront of strong advocacy of Brunson’s prosecution as relations with Washington deteriorated.

Andrew Craig Brunson, an evangelical pastor from Black Mountain, North Carolina, arrives at his house in Izmir, Turkey, July 25, 2018.

The American pastor is facing up to 35 years in jail on terrorism and espionage charges. His next court hearing is scheduled for Friday. Prosecutors accuse Brunson of supporting followers of the U.S.-based Turkish cleric Fethullah Gulen, blamed by Turkey for the 2016 failed coup in Turkey. Brunson is also accused of aiding the PKK, a banned Kurdish separatist group.

“It’s not only the evangelical base of Donald Trump. A wide range of Americans mostly view Brunson and other American detainees as political hostages,” said political analyst Atilla Yesilada of Global Source Partners.

“Any normalization of relations is out of the question as long as Brunson is detained,” he added. “If Brunson is not allowed to return home after Friday’s hearing, Trump may become impatient and impose more sanctions.”

The threat of further U.S. sanctions against Turkey's embattled economy is fueling speculation the pastor will be freed.

“Yes, I expect him to be released. There is more and more expectation Turkey will do it,” said international relations professor Huseyin Bagci of Ankara’s Middle East Technical University.

“With America, I don’t expect relations will get worse,” he added. “On the contrary, there will be durable stability, and in the long run, Turkey-U.S. relations will continue as before. Turkey and America need one another.”

Despite the current crisis in relations, which extends to many other issues, the two NATO allies are continuing to cooperate on Syria. Ankara recently said that cooperation has improved.

FILE - A money changer counts Turkish lira notes at a currency exchange office in Istanbul, Aug. 2, 2018. The lira has taken a beating since U.S. sanctions were applied in the case of a detained pastor, Andrew Brunson.

The growing expectation of Brunson's release Friday, and with it, the removal of further U.S. sanctions, is seen as a reason why the Turkish lira has stabilized after weeks of steep declines.

However, some analysts remain cautious, citing the opaque nature of Turkey’s decision-making process. “There is a significant risk these expectations [Brunson’s release] won’t be met,” said chief economist Inan Demir of Nomura International. “It’s extremely difficult to gain insight into the thinking of the chief policymakers, so there is room for negative surprises, definitely.”

“I don’t see a clear approach from the ruling AKP camp that he is going to be released. Certainly, there is no unified approach preparing public opinion for his release,” Yesilada added.

FILE - Supporters of Turkey's President Recep Tayyip Erdogan's ruling Justice and Development Party (AKP) attend an election rally in Gaziantep, eastern Turkey, June 21, 2018.

Analysts suggest Brunson’s release is complicated by some Erdogan advisers who are warning him about appearing weak in the face of Washington’s pressure.

There are numerous other outstanding issues between the NATO allies. Next month the United States is set to impose severe sanctions on Turkey’s neighbor, Iran, and Washington is lobbying Ankara to comply with the measures.

“Ankara could be looking for a reciprocal gesture by Washington for Brunson's release,” said former senior Turkish diplomat Aydin Selcen, who served in Washington. Trump has reportedly ruled out any concessions until Brunson is back in the United States. However, analysts point out Trump has so far not imposed any new measures against Turkey.

FILE - A customer uses an automated teller machine at a branch of Halkbank in Istanbul, Aug. 15, 2014.

The Turkish state-owned Halkbank is facing a significant fine that could run into many billions of dollars for violating previous sanctions on Iran. Analysts suggest the magnitude of the penalty could be linked to Brunson.

Analysts think a significant fine, along with the risk of further investigations and penalties against other Turkish banks, could deal a considerable blow to Turkey's already-weakened financial system.

“It’s all like a house of cards. Everything depends on whether Brunson is released,” said Yesilada. “If he is released, it opens the door to resolving other issues [between Ankara and Washington]. The alternative is an escalation in tensions that could lead to all-out [sanctions] war, like the United States against Iran.”